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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    An American perception.. The budget agreement is invalid after 2023, and the solution is to establis

    rocky
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    An American perception.. The budget agreement is invalid after 2023, and the solution is to establis Empty An American perception.. The budget agreement is invalid after 2023, and the solution is to establis

    Post by rocky Thu 30 Mar 2023, 12:01 pm

    An American perception.. The budget agreement is invalid after 2023, and the solution is to establish "Skomo"




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    2023-03-30 10:58
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    Shafaq News/ An American report identified the issues that still need negotiations and settlement between the Kurdistan Region and the federal government in Baghdad, regarding the 2023 budget, considering that the government's approval of the current draft budget does not definitively answer many questions.



    After a year-long process full of bickering to form the government after the 2021 parliamentary elections, the country remained without a budget in 2022, and expenditures were limited to paying salaries and pensions.
    A report by the American "Washington Institute" for research, translated by Shafak News Agency, stated that during the past years, debates over allocations and deductions were mixed with broader questions related to the principle of federalism: Does the region have the legal authority to explore for and market oil? And what should be the per capita share of non-sovereign spending in the absence of an official population census? What percentage of the budget should be allocated to non-sovereign expenditures?
    And the American report considered, “Each faction of Iraq has its own and strong motives to pass the current year’s budget as soon as possible,” noting that “investments are still frozen at a time when oil prices are high, and federal reserves have accumulated to currently record a huge level of 115 billion.” dollars, given that the 2022 budget was not approved.
    Baghdad pragmatism
    The report stated, "All factions are now eager to benefit from the resulting budget, which will be larger than usual, and which is expected to include $152 billion in spending, or a full 50% of the 2021 budget. Therefore, allocating a share for the Kurds is within everyone's reach." year, and the KRI's spending needs can be met (albeit barely) without focusing on other beneficiaries.
    The report pointed out that there are issues that still require negotiation, and in practice, many decisions must still be taken, as one of the most important outstanding issues is the marketing of the quantities of oil produced by the region, amounting to 400 thousand barrels per day, and the method of managing the revenues generated.
    He believed that Baghdad had, in the past, drawn up overly complex schemes for the region to force it to hand over all or part of its oil exports to the federal authorities in the port of Ceyhan on the Turkish coast, where the pipeline route between Iraq and Turkey ends.
    And the American report pointed out, “This time it seems that Baghdad will suffice with adopting a more pragmatic approach, as according to the provisions of the current budget draft, the region will market its oil and deposit the revenues in a bank account that federal officials can monitor, and after that, Baghdad will deduct that amount from its monthly allocations.” to the region, with the transfer of any surplus funds owed to the Kurds.
    However, the effect of this arrangement will be valid for only one year, and perhaps only half a year in practice, given that finalizing the budget may take a few more months, and therefore a more sustainable system cannot be imposed before Iraq passes a federal oil and gas law, and perhaps a law sharing revenues as well,” according to the American report.
    oil deal
    The report believes that only through a legal settlement at this level may be sufficient to reconsider the decision of the Federal Supreme Court issued in February 2022, which ruled the unconstitutionality of the region’s oil exports, otherwise the oil and gas law approved by the regional government in 2007 and related investment contracts will remain unconstitutional. legitimacy.
    In addition, the report considered that Baghdad, the regional government and other oil-producing provinces must agree on a few other matters if they hope to facilitate further progress on these issues after the 2023 budget agreement, including "sharing revenues according to a fixed equation."
    Founding of "Skomo"
    In addition to determining the region's per capita share of non-sovereign expenditures, Baghdad must resolve the controversy over sovereign and non-sovereign expenditures, and therefore it must determine the size of the "candy cake" from which the region will receive a piece, according to the "Washington Institute" report.
    The American report believed that this measure must be taken so that a similar agreement does not arouse resentment among non-Kurdish voter bases. It is better for the government to include compensatory incentives in the projects of the executive ministry in oil-rich southern Iraq for the years 2023 and 2024.
    The Washington Institute urged, according to its report, to "introduce gradual changes to oil marketing," adding, "The region must market its oil to pay off debts owed to merchants amounting to $3.5 billion, as it seems that Baghdad is unwilling to bear these arrears." ".
    He stated, "After paying off these debts, it is possible to reach an arrangement for joint oil marketing, similar to the implementation of the proposal that is repeatedly put forward regarding the establishment of the Iraqi and Kurdish Oil Marketing Company (Skomo)."
    The American report warned that "any change in international contracts (almost all of which are codified in the English law for arbitration in foreign courts) may lead to many lawsuits that would harm Iraq's level of friendship with investors."
    Therefore, the report stressed the need for "any new oil and gas law to exclude the provisions of the current contracts signed under the (Kurdistan Oil and Gas Law of 2007)".
    He added, "If the proposed Kurdish regional oil company is established as a joint venture between the federal and Kurdish ministries of oil, it should be given full local authority to approve annual plans and budgets for field development."
    Kurdistan reforms
    In addition, the American report stressed the need to "undertake economic reforms in the region, despite the large share allocated to Kurdistan from the huge national budget, the region will hardly be able to establish a balance in its regional budget for this year."
    And he believed that "the situation is likely to be better in the coming years, so the regional government should prepare by carrying out economic reforms such as reducing subsidies, increasing efficiencies, and transferring public sector employees to the private sector."
    On the political level, the report said, "The credit goes to international actors, led by the United States, for resolving the issue after urging the main parties in the Kurdistan Region to show greater flexibility on local Kurdish issues and greater unity in their dealings with Baghdad."
    The American Institute concluded the report by stressing the need to continue these efforts with the same intensity until the oil and gas law is ratified. Inaction now may quickly lead to a renewal of the dispute between the Kurds, which may eliminate the possibility of signing a historic agreement.
    Translation: Shafak News Agency
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